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The firm ascribed the dip to volatility in Asian equity markets since it launched the fund in August last year.

In January, Asian Property Income's underlying vehicle, ARA Strategic Capital's Asian Asset Income fund, increased its maximum hedge position from 20 to 50 per cent of NAV as a response to market conditions.

Stephen Finch, chief executive of ARA, said: "The assets that we invest in are very fixed income-like, but by virtue of their listing on the equity markets and the wild swings in investor flows in and out of Asia, you see excess volatility relative to the income production fundamentals.

"We expect to deliver dependable income, solid growth and much lower volatility than if an investor invested in the asset class directly."

Mr Finch observed the portfolio employed index futures to manage the beta exposure to its investment universe and used its understanding of valuations and fundamentals to deliver returns on its long positions.

The asset-backed equities in the fund include holdings in infrastructure and utility securities as well as Reits.

The fund has 30 per cent in Singapore, 22 per cent in Australia and 21 per cent in Hong Kong. The share prices and income are hedged back into sterling and are therefore less subject to currency volatility.